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Restructuring causes profit fall for UGL

Engineering firm UGL's first half profit has slumped by 53 per cent due to $25 million in costs from a restructure.

UGL made a net profit of $26 million in the six months to December 31, down from $55.4 million in the previous corresponding period.

Underlying net profit, which excludes the costs of its restructure and rebranding of one of its businesses, was $51 million in the six months to December, down from $72.2 million in the previous corresponding period.

Chief executive Richard Leupen said cost overruns on several infrastructure projects also contributed to the weaker performance, but those projects are now either complete or near completion.

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"With the restructuring and repositioning now largely behind us, UGL is now returning to normal trading in the second half of financial year 2013," Mr Leupen said in a statement on Wednesday.

He forecast an underlying net profit in the full 2012/13 financial year of between $150 million and $160 million.

UGL's underlying net profit in 2011/12 was $168.3 million.

"Volatility in commodity prices continues to result in cancellations and delays of major projects in the resources and infrastructure sectors," Mr Leupen said.

"Combined with UGL's balanced risk appetite and focus on margin protection, this has led to a delay in the major projects pipeline for financial year 2013."

UGL's property and rail businesses were expected to continue to perform strongly, helping to offset the impact of engineering project delays, he said.

The company's restructuring costs relate mainly to the integration of global real estate services company DTZ Holdings, which UGL bought in December 2011.

UGL declared an interim dividend of 34 cents, franked to 50 per cent, unchanged from the same time in the previous year.